Jain v Dr N Kalokerinos Pty Ltd

Introduction

1. The parties did not address the question of whether the notice of appeal raises a question of law or if not, whether leave to appeal should be granted.
2. Before dealing with this issue, it is necessary to set out the applicable legal principles.

The necessity to identify a question of law in a notice of appeal

1. In Thomas and Naaz Pty Ltd (ACN 101 491 703) v Chief Commissioner of State Revenue [2022] NSWCATAP 220 (Thomas and Naaz AP) at [58]-[59], the Appeal Panel stated in respect of an appeal under s 80(2)(b) of the NCAT Act: "58 A Notice of Appeal is required to properly identify the questions of law which are the subject matter of the appeal. As the Court of Appeal stated in Ferella v Chief Commissioner of State Revenue (2014) 96 ATR 875; [2014] NSWCA 378 ("Ferella") at [22] in respect of an appeal from the Administrative Decisions Tribunal to the Appeal Panel (per White J, Barrett JA and Leeming JA agreeing): "As the notice of appeal to the Appeal Panel purported to bе ап appeal оп questions of law, it was necessary for the notice of appeal to identify precisely the particular question or questions of law. It was those questions, if there were any, that should have formed the subject matter of the appeal to the Appeal Panel unless leave were sought and obtained for a merits review (TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178; 19 ATR 1067 at 1070; В & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481; Соlbу Corporation Pty Ltd v Commissioner of Taxation [2008] FCAFC 10; (2008) 165 FCR 133 at [13]; Osland v Secretary to the Department of Justice (No. 2) [2010] НСА 24; (2010) 241 CLR 320 at 333, [21]; Ное v Manningham City Council [2011] VSC 37 at [4]-[5]; Smalley v Secretary, Department of Health and Ageing [2011] FCA 302 at [10] ff)." 59 It is not enough to simply assert (as the appellant did), that the Tribunal erred in its construction and application of certain provisions of the PTA without also identifying how that purportedly occurred. Further, as Leeming JA stated in Ferella at [6], "it is not possible, merely by the device of asking whether the Tribunal erred in law in doing something or failing to do something, to circumvent the statutory limitation on the scope of the appeal". What is required is that a particular question of law be identified for determination on the appeal."
2. The principles identified in Thomas and Naaz AP at [58]-[59] were cited with approval by the New South Wales Court of Appeal in Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 (Thomas and Naaz CA) at [26] (Leeming JA) (with Meagher JA at [1] and Griffiths AJA at [75] agreeing).
3. The same principles apply on an appeal from the Tribunal to the Supreme Court of New South Wakes under s 83(1) of the NCAT Act with leave on "a question of law": Thomas and Naaz CA at [32] (Leeming JA) (with Meagher JA at [1] and Griffiths AJA at [75] agreeing); Hanave Pty Ltd v Nomad Sydney Pty Ltd (formerly Wine Nomad Pty Ltd) [2023] NSWSC 265 (Hanave) at [45] (Chen J).
4. The approach of courts where there is an appeal on a question of law is not to read a notice of appeal narrowly, and to address questions of law that are identified in the notice of appeal as a whole and perhaps also from surrounding circumstances: Fraser v Sperling [2017] VSCA 53 (Fraser) at [56] (Maxwell P, Santamaria and McLeish JJA); McSteen v Architects Registration Board of Victoria [2018] VSCA 96 (McSteen) at [32]-[34] (Maxwell P, Priest and McLeish JJA).
5. In Thomas and Naaz CA the notice of appeal elaborated a large number of bases upon which, so it was said, the Appeal Panel had erred and fell short of squarely identifying a question of law. The Court of Appeal examined the key finding which was the subject of the appeal and found that that there was no error in the finding and that no question of law arose from the finding: at [34]-[58] (Leeming JA) (with Meagher JA at [1] and Griffiths AJA at [75] agreeing).

The scope of a question of law

1. While there is no decision which has addressed the scope of a question of law under s 80(2)(b) of the NCAT Act, courts have addressed the scope of an appeal on a question of law in different legislative contexts.
2. In Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 (Bimson) Beech-Jones CJ at CL heard an appeal under s 56(1)(e) of the Crimes (Appeal and Review) Act 2001 (NSW) (CAR Act) which conferred on a prosecutor a right of appeal to the New South Wales Supreme Court against an adverse costs order made by the Local Court in summary proceedings, which are not with respect to an environmental offence, "but only on a ground that involves a question of law alone". His Honour at [38]-[53] relevantly made the following observations: "[38] In any event, the subject matter of the appeal is a question of law and a question of law alone (Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; 241 CLR 390 at [33] per French CJ) ("Kostas"). The plurality judgment in Kostas at [88] suggests that caution should be exercised in attempting to chart the outer boundaries of such a jurisdiction divorced from the circumstance of the particular case. Their Honours also stated that it is not useful to undertake an analysis which compares and contrasts the formulation in s 56(1) with other phrases such as "appeals on a question of law" or appeals "with respect to a question of law" (cf HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292 at [83] ff per Basten JA). [39] Bearing those observations in mind, three related propositions should be noted. The first is that an appeal on a ground that involves a question of law alone does not include a mixed question of fact and law (see R v PL [2009] NSWCCA 256 at [25] per Spigelman J ("PL (No 1)"). This distinction between a question of law alone and a mixed question of law and fact can often be difficult to identify, much less maintain. [40] This leads to the second proposition, namely that, ultimately it is incumbent on the parties contending that a question of law was decided erroneously, to identify the question and to do so in abstract terms. Thus in Williams v R [1986] HCA 88; 161 CLR 278 at 287 ("Williams"), Gibbs CJ stated: "... there is 'a question of law alone' if the question of law can be stated and considered separately from the facts which it may be connected in a given case." (see also 314 per Wilson and Dawson JJ.) [41] If that task is undertaken, then the consequential questions that will arise are whether the lower court or tribunal either answered that question or proceeded on an assumption concerning that answer, whether its answer or assumption was correct or incorrect, and whether that answer or assumption was material to the outcome, in the sense that it could have affected the outcome (see Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 per Mason CJ; Mark Aronson and Matthew Groves Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013, at [4.270])). … [46] The third and related proposition is that to identify an "error" on the part of the Local Court in the exercise of its discretion in sentencing in terms that amount to an error of the kind identified in House v R [1936] HCA 40; 55 CLR 499 at 504 ("House"), does not of itself answer the question posed by s 56(1) of the Review Act as to whether that court answered a question of law alone incorrectly, or otherwise made an assumption as to the existence of a legal principle which was wrong. … [48] Clearly some of the errors in the exercise of a discretion identified in this passage are capable also of being agitated on appeal restricted to a question of law alone. Thus, if it was apparent that the court had acted on a "wrong principle", then the question of law would be whether that principle was wrong or correct and, if wrong, whether the trial judge acted on that principle and whether that materially affected the outcome. [49] The position is less straightforward if it is only demonstrated that the lower court failed to take into account some material consideration, or allowed extraneous or irrelevant material to guide it. In such a case the reviewing court would have to consider whether it could be inferred from that circumstance that the lower court acted on an incorrect principle by a process similar to that undertaken by Bathurst CJ in PL (No 2). [50] The other form of error identified in the passage from House, namely, that based upon the facts a decision is "unreasonable or plainly unjust", … … [53] Consistent with House, a conclusion that the exercise of judicial discretion was unreasonable or plainly unjust, may enable the appellate court to infer that there was error, but it does not necessarily enable the appellate court to infer that the error was one that involved the lower court applying or adopting a wrong legal principle. …"

Leave to appeal under s 80(2)(b) of the NCAT Act

1. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance." (emphasis in original)
2. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach.
3. Even if an appellant from a decision in the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
4. In Collins, the Appeal Panel at [84] summarised the general principles which govern the granting of leave to appeal: "[84] The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed, BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there."

The scope of a question of law under s 80(2)(b) of the NCAT Act

1. The scope of a question of law considered in Hanave and Ferella was in relation to s 83 of the NCAT Act and one of its statutory predecessors respectively. They confer and conferred an appeal on a question of law and do not and did not otherwise confer any appeal with leave as provided in s 80(2)(b) of the NCAT Act. Because of this difference they are not directly applicable to the determination of the scope of a question of law under s 80(2)(b) of the NCAT Act.
2. Having regard to the statutory context of s 80(2)(b) of the NCAT Act, we are satisfied that the approach in Bimson at [38]-[53], Orr at [109], and Adam at [18]-[21] should be followed as to the scope of a question of law. It is significant that this subsection provides where an appeal does not raise a question of law, an appeal may be made otherwise with leave of the Appeal Panel. Except in the limited circumstances referred to in Adam at [19], a conclusion of mixed fact and law cannot be challenged on an appeal on a question of law under s 80(2)(b) of the NCAT Act. We do not consider that we should follow the approach of the Full Federal Court in Haritos at [110]-[202] in relation to s 44 of the AAT Act, the New South Wales Court of Appeal in ALC at [8] in relation to s 57 of the LEC Act, and the High Court Vetter at [27] in relation to s 32 of the CC Act, as the statutory context in those decisions was the limitation of an appeal to a question of law or an equivalent expression.

Whether the notice of appeal raises a question of law

1. Contrary to the requirements in Thomas and Naaz AP at [58]-[59] and Thomas and Naaz CA at [26], grounds of appeal 1 and 2 do not identify the questions of law to be raised.
2. We have considered whether grounds of appeal 1 and 2 raise any question of law having regard to the principles in Fraser at [56] and McSteen at [32]-[34], and the approach of the Court of Appeal in Thomas and Naaz CA, as well as the guiding principle to facilitate the just, quick and cheap resolution of the real issues in the proceedings pursuant to s 36(1) and (2)(a) of the NCAT Act.
3. We are satisfied that grounds of appeal 1 and 2 raise the following questions of law and accordingly Mr Jain has an appeal as of right in respect of these grounds: 1. as to ground of appeal 1, whether the Tribunal constructively failed to exercise jurisdiction by not addressing a material issue, namely the admission that Mr Jain was an impacted lessee in the DNK defence, which is a question of law within the principles of Resource Pacific at [9]; 2. as to ground of appeal 2, whether s 133A(1) of the Conveyancing Act on its proper construction applied to cll 7.2, 7.3.3, 12.3.1 and 18.7.1.4 of the lease. While we accept that this question is of mixed fact and law within the principles of Vetter at [27], the answer to this question necessarily requires determination of the proper construction of this subsection which is a question of law within the principles of Bianco Walling at [66]. This is a distinct and separate step in the reasoning process as described in Adam at [19].
4. It follows that Mr Jain has a right of appeal in respect of grounds of appeal 1 and 2.
5. We are not satisfied that the challenge by Mr Jain to the exercise of the discretion of the Tribunal in making the costs orders raises a question of law within the principles of House as explained in Bimson at [46], [48]-[50], [53]. Accordingly, the question arises whether leave to appeal should be granted under s 80(2)(b) of the NCAT.

Whether leave to appeal should be granted

1. If we are later found to be in error in finding that grounds of appeal 1 and 2 raise a question of law within s 80(2)(b) of the NCAT Act, we would have granted leave to appeal under this subsection as we would have been satisfied that Mr Jain may have suffered a substantial miscarriage of justice on the basis that the decision of the Tribunal under appeal was not fair and equitable within cl 12(1)(a) of Sch 4 of the NCAT Act. As will be seen, the Tribunal made errors in relation to each of these grounds of appeal. Further, we would have found that each of the factors in Collins at [84(2)] was applicable.
2. We have decided to grant leave to appeal under s 80(2)(b) of the NCAT Act in respect of the costs orders made by the Tribunal for the following reasons: 1. we are satisfied that Mr Jain may have suffered a substantial miscarriage of justice on the basis that the decision of the Tribunal was not fair and equitable within cl 12(1)(a) of Sch 4 of the NCAT Act, where the Tribunal proceeded on the mistaken basis that DNK was successful in proceedings COM 21/51648 and DNK was entitled to a money order in the amount of $60,025.34 in proceedings COM 22/02033; 2. we are satisfied that each of the factors in Collins at [84(2)(a)] to [84(2)(c)] are applicable.

Issue 3: the nature and scope of a new hearing under s 80(3)(a) of the NCAT Act to deal with the appeal

Introduction

1. The appeal submissions of the parties did not address this issue.
2. Before dealing with this issue, it is necessary to set out the applicable legal principles.

The applicable legal principles

1. A new hearing under s 80(3)(a) of the NCAT Act is a hearing de novo: Yuen v Thom [2016] NSWCATAP 243 at [17]; ZOF v NSW Trustee and Guardian [2020] NSWCATAP 167 at [102].

Consideration

1. We are satisfied that on the proper construction of s 80(3)(a) of the NCAT Act, the Appeal Panel may conduct a new hearing that may be limited to particular issues. There is no indication in this subsection that the power to deal with an appeal by way of a new hearing must be in respect of the whole of the case the subject of the appeal. This is a logical construction because an appeal may be in respect of discrete issues, and it would be illogical to conduct a new hearing in respect of all issues that were before the Tribunal. Further, this construction of the subsection gives effect to the guiding principle to facilitate the just, quick and cheap resolution of the real issues in the proceedings pursuant to s 36(1) and (2)(b) of the NCAT Act.
2. We have decided that, in the event that we find that the Tribunal had made a material error of law, we will confine a new hearing under s 80(3)(a) of the NCAT Act to the determination of the issues which the Tribunal did not decide. We will not conduct a new hearing in respect of the issues which have already been decided by the Tribunal.

Issue 4: whether the Tribunal constructively failed to exercise jurisdiction by not addressing a material issue or by overlooking material evidence

Introduction

1. The appeal submissions of the parties did not address this issue, but focussed on whether there was an admission by DNK that Mr Jain was an impacted lessee within the meaning of the 2021 COVID-19 Regulation.

Consideration

1. As set out in [22]-[25] above, the submissions of the parties before the Tribunal clearly raised the material issue of whether there was an admission by DNK in the DNK defence at [2] of the matters in the Jain points of claim at [9]-[11].
2. We are satisfied that the Tribunal by not addressing this material issue or by overlooking that material constructively failed to exercise jurisdiction and thereby committed an error of law.

Issue 5: whether Mr Jain was an impacted lessee within the meaning of the 2021 COVID-19 Regulation at the relevant time

Introduction

1. Before considering this issue, it is necessary to summarise the appeal submissions of the parties.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain submitted that the issue of whether a lessee is an impacted lessee was not a material fact in issue as it has been admitted. While noting that the Tribunal is not bound by the rules of evidence, he submitted that evidence that he was an impacted lessee would not have been admissible pursuant to s 55 of the Evidence Act 1995 (NSW) (Evidence Act) in a court applying the rules of evidence.

DNK's appeal submissions

1. In DNK's appeal submissions, DNK made the following submissions: 1. the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) do not apply to proceedings in the Tribunal; 2. the Jain points of claim and the DNK defence do not have the effect that a formal pleading has in Division 5 of Part 14 of the UCPR; 3. section 55 of the Evidence Act would have precluded the adducing of evidence; 4. paragraph 11 of the Jain points of claim cannot give rise to an admission that alleges that Mr Jain was an impacted lessee within the meaning of the 2021 COVID-19 Regulation because it fails to articulate with precision, the relevant time that he was an impacted lessee, and fails to properly articulate under which regulation he claimed to be an impacted lessee; 5. the evidence of the parties was filed before the Jain points of claim and the DNK defence. Accordingly, there can be no satisfactory explanation given for Mr Jain's failure to adduce evidence on this point.

Mr Jain's appeal submissions in reply

1. In Mr Jain's appeal submissions in reply, Mr Jain made the following submissions: 1. in circumstances where the Jain points of claim at [9]-[10] was not challenged in the DNK defence, in opening submissions, or in cross-examination, they should be regarded as non-controversial for the purposes of the hearing of the Tribunal and this appeal; 2. the Tribunal Decision at [38]-[39] misstates the effect of "the pleading" because there is an error in tense. Whereas the Tribunal found that what was alleged was that "is an impacted lessee", the Jain points of claim at [9]-[10] pleaded specifically in the past tense; 3. in DNK's appeal submissions, DNK primarily examines the effect of the Jain points of claim at [11], which is a point of law.

Consideration

1. Part 14 of the UCPR contains provisions dealing with pleadings. The Dictionary of the UCPR defines "pleadings" to include "a statement of claim, defence, reply and any subsequent pleading for which leave is given under Part 14", but not to include "a summons or notice of motion". Pleadings in the Supreme Court and the District Court are required to be verified: r 14.23 UCPR. A party may not withdraw an admission in a defence that operates for the benefit of the other party, except with the consent of the other party or with the leave of the court: r 12.6(2) UCPR.
2. We are satisfied that an admission in points of defence filed in proceedings in the Tribunal cannot be equated with an admission contained in a defence filed in proceedings in the Supreme Court or the District Court. There is no provision for pleadings in the NCAT Act or the NCAT Rules, and accordingly no equivalent provisions to rr 12.6(2) and 14.23 of the UCPR.
3. Chapter 5 (ss 182-198) of the Evidence Act contains miscellaneous provisions. Section 191 deals with agreements as to facts, and relevantly provides: 191 Agreements as to facts (1) In this section - agreed fact means a fact that the parties to a proceeding have agreed is not, for the purposes of the proceeding, to be disputed. (2) In a proceeding - (a) evidence is not required to prove the existence of an agreed fact, and (b) evidence may not be adduced to contradict or qualify an agreed fact, unless the court gives leave. (3) Subsection (2) does not apply unless the agreed fact - (a) is stated in an agreement in writing signed by the parties or by Australian legal practitioners, legal counsel or prosecutors representing the parties and adduced in evidence in the proceeding, or (b) with the leave of the court, is stated by a party before the court with the agreement of all other parties.
4. In Minister for the Environment, Heritage and the Arts v PGP Developments Pty Ltd (2010) 183 FCR 10; [2010] FCA 58 (PGP) at [35], Stone J made the following observations about s 191 of the Evidence Act 1995 (Cth) (which is in identical terms to s 191 of the Evidence Act): "Section 191 provides that, unless the court gives leave, that the facts stated are not required to be proved by evidence and that evidence may not be adduced to contradict or qualify an agreed fact. The effect of s 191 is to admit the agreed facts as evidence. It still remains for the Court to determine whether the facts are to be accepted as true and to determine what weight to attribute to that evidence. Whether the Court accepts the agreed facts, in whole or in part, may depend, among other things, on the coherence of the narrative created by the facts or their inherent credibility. …

Issue 6: whether the operation of cll 6B and 6C are conditional on an impacted lessee having given the lessor the information in cl 6A(1) of the 2021 COVID-19 Regulation

Introduction

1. Before considering this issue, it is necessary to summarise the appeal submissions of the parties.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain made the following submissions: 1. his failure to comply with cl 6A does not disentitle him from taking advantage of the regime for the purposes of cl 6C, but it does for the purposes of cl 6D for the following reasons: 1. the 2021 COVID-19 Regulation is beneficial legislation and should not be construed narrowly; 2. the maxim of "expression unius est exclusion alterius" (sic) should apply in this case. Where Parliament specifically mentions the consequence of failure to comply with cl 6A in cl 6D(5), its intent by not including a similar clause in cl 6C should be construed such that a failure to comply with cl 6A does not disentitle the lessee from benefiting from cl 6C. To construe otherwise would impliedly place an equivalent of cl 6D(5) into cl 6C; 1. clause 6C(1)(b) is not applicable because Mr Jain did not request a renegotiation. In any event, the "and" between cl 6C(1)(a) and (b) requires that a lessor must not take prescribed action against an impacted lessee without mediation. In essence it mirrors s 68 of the RL Act which imposes a requirement that disputes must go to mediation prior to the commencement of proceedings before any court (which includes the Tribunal); 2. construed together with s 68 of the RL Act, the proper effect of cl 6C and the definition of prescribed action in cl 3 is that a landlord cannot take prescribed action outside the court system using common law remedies such as exercising the right to re-enter (as happened in this case). That is a limited restraint on the landlord's rights, and in light of tile beneficial construction of the RL Act and the 2021 COVID-19 Regulation, is the construction that most suits the purposes of the RL Act. A landlord who does not ask about whether the lessee is an impacted lessee, or the constituent factors in cl 4 in those bare terms (i.e. - is your turnover less than $50 million, and do you receive one of the grants?), must do so at its own risk.

DNK's appeal submissions

1. In DNK's appeal submissions, DNK made the following submissions: 1. asserting that the 2021 COVID-19 Regulation is beneficial legislation is plainly unhelpful. Importantly, cl 6A is cast in mandatory terms and there is no basis for construing it liberally or restrictively. Making the submission that the phrase "an impacted lessee must give the lessor the following information" should be read to mean that it was the landlord's responsibility to procure that information, as contended by the appellant at first instance, is patently incorrect. To read the rule in such a way would do violence to the express terms deployed in "that submission"; 2. the argument advanced by Mr Jain, that there was a positive obligation on DNK to obtain information to establish his status as an impacted lessee defies commercial logic. It flies in the face of the express terms of cl 6A that provides a positive obligation on Mr Jain and states that DNK may request information under this clause if the information is reasonably required to ensure that Mr Jain continued to be an impacted lessee. This is not cured by the assertion that the regulations are to be read beneficially; 3. the regime contemplates that an impacted lessee will identify as such and must provide documentation in support of that contention. The landlord can, once every two weeks, request information for the purpose of satisfying itself that the tenant remains an impacted lessee. To read this as the positive obligation contended for by the appellant is to do violence to the express terms of cl 6A and reverse the onus. Even if it is accepted that this is beneficial legislation, the interpretation contended for by Mr Jain is the exact opposite of the express mandatory terms deployed in the clause. Accordingly, the submission on this point should be rejected; 4. if read in the way contended by Mr Jain, the regime would contemplate a situation where the tenant has not claimed to be an impacted lessee, has not notified the landlord that it is an impacted lessee, then, in the wake of a forfeiture of lease and re-entry, claim that he/she was an impacted lessee for the first time and be entitled to sue for repudiation of lease; 5. subordinate legislation should be construed: 1. bearing in mind that often it will not have been drafted with the same care as an Act of Parliament as explained in Environment Protection Authority v Condon as liquidator for Orchard Holdings (NSW) Pty Ltd (In liq) (2014) 86 NSWLR 499; [2014] NSWCA 149 (Orchard Holdings) at [44]-[45]; 2. liberally so as to avoid an unreasonable result in favour of a reasonably practicable one as explained in Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929 (Gill) and Australian Tea Tree Oil Research Institute v Industry Research Development Board (2002) 124 FCR 316; [2002] FCA 1127 (ATTORI).

Mr Jain's appeal submissions in reply

1. In Mr Jain's appeal submissions in reply, Mr Jain in substance repeated his submissions in Mr Jain's appeal submissions.

Consideration

1. It is uncontroversial that the process of statutory interpretation must start and end with a consideration of the text of the statute. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself: Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 (Consolidated Media) at [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ).
2. The maxim expressio unius est exclusio alterius must always be applied with care, for it is not of universal application and applies only when the intention it expresses is discoverable upon the face of the instrument: Houssein v Under Secretary, Department of Industrial Relations and Technology (NSW) (1982) 148 CLR 88 at 94; [1982] HCA 2 (Stephen, Mason, Aickin, Wilson and Brennan JJ).
3. In Orchard Holdings, the New South Wales Court of Appeal construed the Protection of the Environment Operations (Waste) Regulation 2005 (NSW). It held that the Regulation was to be construed as a whole and in its context, and so that it had a coherent operation. It was legitimate to have regard to the fact that regulations are less carefully drafted, and less keenly scrutinised, than primary legislation: at [43]-[45] (Leeming JA with Bathurst CJ at [1] and McColl JA at [2] agreeing).
4. In ATTORI, Stone J at [37] referred to Gill and at [44] considered the approach to the construction of legislation to avoid an unreasonable result: "[37] … it is necessary to construe the whole of the instrument and in doing so to bear in mind that delegated legislation may not always be drafted with the same precision as Acts of Parliament. The general principles of statutory legislation apply to delegated legislation; King Gee Clothing Co Pty Ltd v The Commonwealth (1945) 71 CLR 184 at 195; Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 398. However, as Pearce and Argument comment in Delegated Legislation in Australia 2nd ed 1999 at p342, there is "one approach to the interpretation of subordinate legislation which is different from that used for Acts of Parliament." The learned authors quote the comments of Lord Reid in Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929; [1963] 3 All ER 180. Lord Reid, in the course of considering regulations made under the Factories Act 1937 (UK) concerning the use of scaffolding etc, commented that such regulations were addressed to practical people and were directed to preventing accidents. His Lordship observed (at 934; 183) that such regulations: "ought to be construed in the light of practical considerations, rather than by a meticulous comparison of the language of their various provisions, such as might be appropriate in construing sections of an Act of Parliament. ... difficulties cannot always be foreseen, and it may happen that in a particular case the requirements of a regulation are unreasonable or impracticable; but, if the language is capable of more than one interpretation, we ought to disregard the more natural meaning if it leads to an unreasonable result, and adopt that interpretation which leads to a reasonably practicable result."" "[44] As Lord Reid pointed out in Humberstone (see [37] above) it may be justified to adopt a less natural meaning of words in delegated legislation to avoid an unreasonable result "if the language is capable of more than one interpretation". In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 the majority of the High Court in a joint judgment stated: "inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent." In these cases the House of Lords and the High Court of Australia accepted that adopting a particular meaning in order to avoid an unreasonable result is only permissible where the words being considered are ambiguous: see also Minister for Immigration and Multicultural Affairs v Lim (2001) 112 FCR 589 at 593. In such a case the unreasonableness of the consequences of one interpretation assists in determining which of the possible constructions is to be preferred; see also Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320. I might also add that the likelihood of the absurd or unreasonable consequence actually occurring should also be a consideration."

Issue 7: whether the re-entry of DNK to the premises on 13 December 2021 was prohibited by cl 6C of the 2021 COVID-19 Regulation

Introduction

1. It was common ground that the dispute between the parties was not referred to mediation under Pt 8 Div 2 of the RL Act.
2. The parties did not address any submissions on this issue.

Consideration

1. As para (b) of the definition of "prescribed action" in cl 6A(1) of the 2021 COVID-19 Regulation specifies "exercising a right of re-entry to premises or land the subject of the commercial lease", we are satisfied that in the circumstances the re-entry of DNK to the premises on 13 December 2021 was prohibited by cl 6C.

Issue 8: whether Mr Jain suffered any, and if so what, loss as a result of the repudiation of the lease by DNK

Introduction

1. This issue arises in view of the concession of DNK that, if the re-entry of DNK to the premises on 13 December 2021 was prohibited by cl 6C of the 2021 COVID-19 Regulation, then it repudiated the lease and its repudiation of the lease was accepted by Mr Jain.
2. We do not accept the submission of Mr Jain that the proceedings should be remitted to the Consumer and Commercial Division of the Tribunal for further determination as to quantum. As advised to the parties at the hearing, we decided that we would determine the appeal by way of a new hearing pursuant to s 80(3)(a) of the NCAT Act if we decided that the Tribunal made a material error. We have decided to confine the new hearing arising from this material error to the determination of the issue of whether Mr Jain suffered any, and if so what, loss as a result of the repudiation of the lease by DNK.
3. As particularised in the Jain points of claim at [31] and set out in the first Jain statement at [72], Mr Jain claims the following amounts for the following heads of damage arising the repudiation of the lease by DNK: 1. loss of perishable foods: $15,000.00 (item D.1.); 2. cost of moving to new premises: $2,100.00 (item B.4.), $6,000.00 (item B.5.), $20,000.00 (item C.2.), $6,000.00 (item D.2.), and $5,200.00 (item E.1.); 3. loss of business in the period between 13 December 2021 and 13 January 2022: $36,000.00 (item C.1.).
4. We do not consider that the amounts claimed for damages in items A.1, B.1 and B.2 in the first Jain statement at [72] are heads of damage arising from the repudiation of the lease by DNK and so we have not decided whether they are recoverable by Mr Jain.
5. Before considering this issue, it is necessary to set out the applicable legal principles, and summarise the evidence of Mr Jain, the submissions of the parties at the hearing and the appeal submissions of the parties.

The applicable legal principles

1. In Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 (Amann Aviation) Mason CJ and Dawson J held at 83: "The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Indeed, in Jones v Schiffmann (1971) 124 CLR 303, Menzies J went so far as to say that the "assessment of damages … does sometimes, of necessity involve what is guess work rather than estimation": at 308. Where precise evidence is not available the court must do the best it can. And uncertainty as to the profits to be derived from a business by reason of contingencies is not a reason for a court refusing to assess damages." (citations omitted) Toohey J at 134 and Gaudron J at 153 made similar observations.
2. In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257 (Placer) at [38], Hayne J said (with Gleeson CJ, McHugh and Kirby JJ at [6] agreeing): "[38] It may be that, in at least some cases, it is necessary or desirable to distinguish between a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind. …" (footnotes omitted)

The first Jain statement

1. In the first Jain statement, Mr Jain gave the following evidence: " … 53. I estimate that the cost of wages and the hire of removalist equipment for the 27 December 2021 were around $2,000. … 62. I estimate the cost of the 28 December 2021 to be approximately $6,000 as I had hired a crane from Sydney to attend to remove the large items which alone cost $4,000. … 72. My loss includes the following: Event Value of loss (approximate) Documents Date: 15.10.2021 A.1 Mr Kalokerinos storms onto premises and berates Lessee in front of customers and refused to allow Lessee to conduct his business. $1,200.00 Lessor storms into property and demands Lessee fix leak. Date: 24 May 2021 and 29 October 2021 Carter Ferguson B.1 Legal Fees regarding notices by Lessor. Legal fees incurred as a result of the unconscionable behaviour of the Lessor. $3,331.21 Receipts dated 24 May 2021 and 29 October 2021. … Date: 25 January 2022 Carter Ferguson B.2. Legal Fees regarding AVO and response to Lessor's AVO $2,200.00 Invoice dated 25 January 2022. Legal fees incurred as a result of the unconscionable behaviour of the Lessor. Date: 27.12.2021 B.4. Unable to retrieve property following unlawful eviction $2,100.00 Paid cash to removalist. Lessor did not allow the Lessee access to the Premises to retrieve his property. Loss relates to cost of wages and hire of removalist equipment for 27.12.2021. Date: 27.12.2021 B.5. Unable to retrieve property following unlawful eviction $6,000.00 Paid cash to removalist. Lessor again refused entry to the Lessee to remove his property. Loss relates to cost of hiring a crane from Sydney to remove large items. BAS Statement C.1. Date: 13.12.2021 $36,000.00 for the Loss of Income due to inability to trade for 4 weeks. month 13.11.2021- 12.12.2021. Date: 27.12.2021 C.2. Relocation costs $20,000.00 Includes setting up the premises Cost of relocating to a new premises in Warrawong Date: 13.12.2021 Expired Stock Value of perishable stock on hand lost as a result of unlawful eviction. CBA Bank Statement, dated 1.10.2021- D.1. See transaction on 3.12.2021 $15,000.00 30.12.2021 - South Coast Chicken $2,586.10 See transaction on 30.11.2021 - Christians Premium Meats $789.70 Date: 13.12.2021 D.2. Chattels which were destroyed or no longer useable $6,000.00 - Kitchen sinks - Chairs and dining tables (no longer used as new premises doesn't have room for dine in) Date: 13.12.2021 E.1. Loss of benefit from prepaid rent for period 13.12.2021- 17.01.2022 $5,200.00 Lessee had prepaid rent up until 17.1.2022 Date: 13.12.2021 E.6. Bond paid and not returned $5,200.00 Lessee has not been refunded his bond.

… 76. I have lost a significant amount of trade and bargaining ability over this period due to the direct actions of the Lessor. …"

1. In the first Jain statement, Mr Jain attached the following documents: 1. the following letters of his solicitors, Carter Ferguson (CF) to DNK: 1. the letter dated 8 May 2021 responding to a notice of termination of lease dated 30 April 2021; 2. the letter dated 19 October 2021 responding to allegations of breaches of the lease by Mr Jain which did not relate to a failure to pay rent or outgoings, or the business operating hours; 1. the bank statement of the Commonwealth Bank of Australia in the name of "The Director Vardhaman Group Pty Ltd" for the period from 1 October 2021 to 30 December 2021 (the CBA bank statement) which records the following debit entries: 1. a payment of $789.70 to Christians Premium Meats on 30 November 2021; 2. a payment of $2,586.10 to South Coast Chicken on 3 December 2021; 1. the following CF receipts: 1. receipt dated 24 May 2021 for $1,305.00 in respect of the CF invoice dated 18 May 2021 (the 24 May 2021 CF receipt); 2. receipt dated 29 October 2021 for $1,802.35 in respect of the CF invoice dated 27 October 2021 (the 29 October 2021 CF receipt); 1. the invoice of CF dated 20 January 2022 for $2,200.00 with details "Apprehended Violence Order; Local Court of New South Wales (Wollongong)" (the 20 January 2022 CF invoice); 2. a GST report for "Vardhaman Group Pty Ltd" for the period from 13 November 2021 to 15 December 2021 which records the amount of $39,463.38 for total sales and income less GST, and the amount of $19,619.78 for total purchases and expenses less GST, including $5,267.61 for GST free items (the December 2021 GST report).

The second Jain statement

1. In the second Jain statement, Mr Jain did not give any evidence relevant to this issue.

The Jain submissions

1. In the Jain submissions, Mr Jain made the following submissions: 1. the Tribunal should do the best it can in calculating damages as explained in Amann Aviation; 2. the amount of $15,000.00 should be allowed for loss of the lease; 3. the monthly surplus of approximately $20,000.00 recorded in the December 2021 GST report should be allowed for having to close the business for one month; 4. the GST-free component of expenses in the December 2021 GST report is likely to be for perishable supplies, as uncooked food is GST-free; 5. he had given evidence as to why receipts were not available, having paid cash to minimize his loss. It was common ground that a crane was used for the removal. In the absence of receipts, the Tribunal should make an estimate of the costs of moving which include the crane; 6. DNK's conduct in wrongfully asserting its legal rights caused him to incur legal expenses.

The DNK reply submissions

1. In the DNK reply submissions, DNK made the following submissions: 1. Mr Jain conflates difficulty in calculating damages by reason of accounting for future contingencies as happened in Amann Aviation and the difficulty in calculating damages that arises from a wholesale failure on his part to lead evidence that would enable the Tribunal to accurately calculate damages; 2. it is not open for the Tribunal, to assess the value of losses in the absence of any evidence in support of those figures. If there is no evidence quantifying a litigant's loss, the losses must be assessed as nominal; 3. there was no evidence before the Tribunal to suggest that Mr Jain suffered a loss of $15,000.00 or any loss at all for the wrongful termination of the lease; 4. the December 2021 GST report was not a BAS statement, but was a report produced by someone who has not been identified. It was not verified and was produced in relation to an entity that was not a party to the lease or the proceedings; 5. there is no evidence as to the loss of perishable items as the December 2021 GST report has no probative value.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain made no submissions other than the proceedings should be remitted to the Consumer and Commercial Division of the Tribunal for further determination as to quantum.

DNK's appeal submissions

1. In DNK's appeal submissions, DNK opposed the remittal of the proceedings to the Consumer and Commercial Division of the Tribunal for further determination as to quantum. There was no probative evidence of any loss suffered by Mr Jain.

Mr Jain's appeal submissions in reply

1. In Mr Jain's appeal submissions in reply, Mr Jain submitted that findings regarding the damages needed to be made, and were not properly the subject of this appeal on a matter of law. If the Appeal Panel seeks to make findings on quantum, then the full file below needs to be tendered for the Appeal Panel, and this should occur at a later hearing. Otherwise, remitter would reduce the costs of determination of damages.

An adjournment of the appeal

1. Notwithstanding Mr Jain's appeal submissions in reply, Mr Jain did not make any application for the adjournment of the appeal to enable the whole of the evidence before the Tribunal to be tendered.
2. If we are later found to be in error in finding that Mr Jain did not make any application for the adjournment of the appeal to enable the whole of the evidence before the Tribunal to be tendered, then we would have refused the application for the following reasons: 1. Mr Jain was on notice by note 11(3) of the 1 February 2023 orders that the Appeal Panel might decide to proceed, if appropriate, to deal with the appeal by way of a new hearing pursuant to s 80(3) of the NCAT Act; 2. there was no submission by Mr Jain indicating what further evidence would have been relevant to this issue; 3. an adjournment of the appeal pursuant to s 51 of the NCAT Act would have been inconsistent with the guiding principle to facilitate the just, quick and cheap resolution of the real issues in the proceedings pursuant to s 36(1) and (2)(a) of the NCAT Act.

Loss of perishable foods

1. We are not satisfied that Mr Jain has established any loss of perishable foods as there is no evidence as to the relationship of Mr Jain and the business carried on at the premises and Vardhaman Group Pty Ltd. The CBA bank statement and the December 2021 GST report relied on by Mr Jain relate to Vardhaman Group Pty Ltd. The situation is within the principle in Placer at [38] rather than Amann Aviation at 83, 134 and 153 that Mr Jain, although apparently able to do so, did not adduce precise evidence.

Cost of moving to new premises

1. We are not satisfied that Mr Jain has established any cost of moving to new premises. The situation is within the principle in Placer at [38] rather than Amann Aviation at 83, 134 and 153 that Mr Jain, although apparently able to do so, did not adduce precise evidence.

Loss of business in the period between 13 December 2021 and 13 January 2022

1. We are not satisfied that Mr Jain has established any loss of business in the period between 13 December 2021 and 13 January 2022 as there is no evidence as to the relationship of Mr Jain and the business carried on at the premises and Vardhaman Group Pty Ltd. The December 2021 GST report relied on Mr Jain relates to Vardhaman Group Pty Ltd. Mr Jain did not identify evidence of the rent paid in the advance for the period from 13 December 2021 to 17 January 2022. The situation is within the principle in Placer at [38] rather than Amann Aviation at 83, 134 and 153 that Mr Jain, although apparently able to do so, did not adduce precise evidence.

Conclusion

1. A breach of contract gives rise to a cause of action even though it is not shown to have caused loss or damage, the reason being that there is a legal right to performance of the contract, which is infringed upon breach without more, and in such a case nominal damages are awarded to vindicate the right and to mark its infringement: Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 (Cell Tech) at 375 (Lindgren J). While the amount to be ordered is discretionary, it is not unconfined, and the customary amount was recently decided to be $100.00: In the matter of ACT Land Pty Ltd (in liquidation) [2019] NSWSC 1860 (ACT Land) at [62] (Rees J).
2. Consistent with the principles in Cell Tech at 375, for the reasons set out in [149] to [151] above Mr Jain has not established that he has suffered any loss by the repudiation of the lease by DNK. In addition to these reasons, we are not aware as to whether there was relevant oral evidence of Mr Jain on this issue, as the transcript of the hearing before the Tribunal was not provided by Mr Jain. Accordingly, Mr Jain is entitled to nominal damages. We see no reason to depart from the approach in ACT Land at [62], and have decided to award $100.00 as nominal damages. It follows that order 1 in proceedings COM 21/51648 should be set aside, and in substitution DNK should pay $100.00 to Mr Jain.

Issue 9: whether Mr Jain remained liable to perform any, and if so what, obligations under the lease after 20 December 2021

Introduction

1. The Tribunal referred to cll 7, 7.3, 12.3 and 18.7.1.4 of the lease in the Tribunal Decision at [82]. However, the Tribunal did not identify which clause was relied upon in awarding damages to DNK apart from the amounts awarded for the repair of the balcony (cl 18.7.1.4 - the Tribunal Decision at [94]-[98]) and for redecoration by way of painting (cl 7.3 - the Tribunal Decision at [99]-[100]).
2. The parties are in disagreement as to whether Mr Jain remained bound by cl 7.3.3 of the lease. The Tribunal found in the Tribunal Decision at [83] that Mr Jain remained bound by this subclause even if DNK wrongfully terminated the lease.
3. The Tribunal in the Tribunal Decision at [76]-[80] found that Mr Jain was bound by cl 12.6 of the lease after 20 December 2021. There is a question as to whether the Tribunal was correct in making this finding.
4. The Tribunal in the Tribunal Decision at [93] implicitly found that Mr Jain was bound by cl 12.3.1 of the lease after 20 December 2021 in relation to the cost to the cost of removing the sign on the balcony and rectifying the damage caused by the removal. There is a question as to whether the Tribunal was correct in making this implicit finding.
5. The Tribunal in the Tribunal Decision at [94]-[98] implicitly found that Mr Jain was bound by cl 18.7.1.4 of the lease after 20 December 2021 in circumstances where it had recorded at [21], that Mr Jain removed his goods and chattels from the premises using a crane and removing the balcony handrail during the period between 28 and 31 December 2021 and DNK complained that this action resulted in damage being sustained to the tiles and balustrade on the balcony. There is a question as to whether the Tribunal was correct in this implicit finding.
6. Before considering this issue, it is necessary to summarise the appeal submissions of the parties.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain made the following submissions: 1. he was discharged from cl 7.3.3 of the lease in accordance with the principle in McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457; [1933] HCA 25 (McDonald) as explained in De Rucci International Pty Ltd v Zhu [2020] NSWSC 1720 (De Rucci) at [44]-[46]; 2. DNK may not take advantage of its own wrong as explained in TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130.

DNK's appeal submissions

1. In DNK's appeal submissions, DNK made the following submissions: 1. clause 12.1 of the lease does not define the term "end." Accordingly, the submission that the lease did not end within the meaning of cl 12.1 is misconceived. Further, cl 7.3.3 is not qualified. It does not state that the obligation arises only when the lease ends in accordance with cl 12.1. The phrase "however it ends" should be given the usual and ordinary meaning attributed to that phrase. The lease has plainly ended and the obligation to decorate arises. The appellant was therefore obligated to decorate the premises in accordance with cl 7.3.3 of the lease; 2. the reading of cl 7.3.3 and the invocation again of s 133A of the Conveyancing Act in the manner contended by Mr Jain means that this clause, which appears in a standard NSW Law Society Lease Agreement, would have no work to do under any circumstance; 3. as to the finding of the Tribunal in the Tribunal Decision at [83] that Mr Jain remained bound by this subclause even if DNK wrongfully terminated the lease: 1. this observation is obiter; 2. the authorities referred to by Mr Jain relate to contracts of guarantee. Notwithstanding, the natural consequence of termination of contract is that all of the primary obligations arising from that contract are, from the time of termination discharged. The exception is that rights that have already been unconditionally acquired are not discharged. This right falls within that exception. The right was unconditionally acquired within the 3 months prior to the termination date. It is enforceable. The judgment sum should not be reduced by the sum of $3,445.00 plus preliminaries and margin or at all; 3. the precise ambit of the principle that a party cannot take advantage of its own wrong is not clear as explained in BGL Operations Pty Ltd v Allied Express Transport Pty Ltd [2011] NSWCA 41 (BGL Operations) and Nicholls v Michael Wilson & Partners Ltd [2010] NSWCA 222; 243 FLR 177 at [181]. There was no advantage arising from any wrongdoing, even if DNK did repudiate the lease. Mr Jain was always required to decorate upon the end of the lease. That it occurred earlier than Mr Jain anticipated is of no moment and does not constitute an advantage as it is understood by the authorities.

Mr Jain's appeal submissions in reply

1. In Mr Jain's appeal submissions in reply, Mr Jain submitted that the cause of the premises not being redecorated was the termination of the contract. The question is, who was the 'cause' of that non-performance? If the contract was terminated by accepted repudiation, as he contends, then DNK was the cause of a lack of redecoration - the reason the premises were not redecorated was because DNK locked him out. The best reading of 'however it ends' is that it only applies to the lease ending when it is not the fault of the landlord, in line with the prevention principle as explained in Probuild Constructions (Aust) Pty Ltd v DDI Group Ply Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 at [114].

Consideration

1. In deciding this issue, the following questions arise for consideration: 1. whether cll 7.3.3, 12.3.1 and 12.6 on their proper construction apply where the lease is terminated by the lessee for breach or repudiatory conduct of the lessor; 2. whether Mr Jain was discharged from performance of cll 7.3.3, 12.3.1, 12.6 and 18.7.1.4 of the lease after 20 December 2021; 3. whether DNK was precluded by the prevention principle from insisting on the performance of cll 7.3.3 and 12.3.1 of the lease by Mr Jain.
2. If the first question is answered in the negative, then the second and third questions so far as they relate to cll 7.3.3, 12.3.1 and 12.6 do not arise for determination.

Whether cll 7.3.3, 12.3.1 and 12.6 on their proper construction apply where the lease is terminated by the lessee for breach or repudiatory conduct of the lessor

1. In BGL Operations at [63] Macfarlan JA (with Giles JA at [1] and Campbell JA at [2] agreeing) made the following observations about the principle that a party cannot take advantage of its own wrong: "[63] The precise ambit of this principle (if indeed it can properly be described as a principle at all: see Young JA in Nicholls v Michael Wilson & Partners Ltd [2010] NSWCA 222; 243 FLR 177 at [181]) is not clear. It can at least be used in some circumstances to prevent a person relying upon the occurrence of an event where the event has been brought about by the person's own conduct (see generally Ruthol Pty Ltd v Mills [2003] NSWCA 56; (2003) 11 BPR 20,793 at [88]-[100]) and to justify a construction of a contract that precludes a wrongdoer taking advantage of his or her own wrong (see Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 at 440-1; TCN Channel 9 v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 147). …"
2. We are satisfied that the expression "however it ends" in cl 7.3.3 refers to the three alternative ways "the lease ends" as specified in cl 12.1. It is significant that cl 7.3.3 uses the same word "ends" as used in cl 12.1, rather than language that would specifically encompass termination for breach or repudiatory conduct of the lessor. In the absence of such language the preferable construction is to read the expression "however it ends" in the light of and consistently with cl 12.1. Clause 7.3.3 does not encompass the circumstances where the lease is terminated by the lessee for breach or repudiatory conduct of the lessor. This construction is supported by the principle that a party cannot take advantage of its own wrong as explained in BGL Operations at [63].
3. We do not accept the construction of the expression "however it ends" as found by the Tribunal in the Tribunal Decision at [83] as it fails to take account of the same language used in cl 12.1. Further, we do not accept the submission of DNK that this construction means that cl 7.3.3 would have no work to do under any circumstance. It would apply in each of the three circumstances in cl 12.1.
4. We are satisfied that 12.3.1 on its proper construction does not apply where the lease is terminated by the lessee for breach or repudiatory conduct of the lessor. The introductory words "(w)hen this lease ends" of this subclause indicate that its application is limited to the circumstance where the lease ends in one of the three alternative ways specified in cl 12.1.

Whether Mr Jain was discharged from performance of cll 7.3.3, 12.3.1, 12.6 and 18.7.1.4 of the lease after 20 December 2021

1. In McDonald at 476-477 Dixon J explained the rights and obligations arising as a result of a repudiation of a contract (with Rich J at 467 and McTiernan J at 486 agreeing): "When a party to a simple contract, upon a breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected. When a contract is rescinded because of matters which affect its formation, as in the case of fraud, the parties are to be rehabilitated and restored, so far as may be, to the position they occupied before the contract was made. But when a contract, which is not void or voidable at law, or liable to be set aside in equity, is dissolved at the election of one party because the other has not observed an essential condition or has committed a breach going to its root, the contract is determined so far as it is executory only and the party in default is liable for damages for each breach."
2. In De Rucci at [207]-[225] Rothman J considered the principles of repudiation of a contract. His Honour at [222]-[224} summarised these principles: "[222] The combination of the principles expressed in McDonald v Dennys Lascelles Ltd and of those expressed by Lord Diplock in Moshi results in the termination of a contract for repudiation putting an end to the primary obligation of the party not in default. That party is not then required to perform any of the contractual promises that have not already been performed by the time of the repudiation. It does not give rise to any secondary obligation in substitution for the primary obligations in the contract. It also deprives the non-defaulting party of any right, as against the other party, to continue to perform contractual promises. [223] Further, the primary obligations of the party in default, remaining unperformed, similarly come to an end. So too does the defaulting party's right to continue to perform those promises. But, in the case of the defaulting party, secondary obligations are substituted by operation of law, which require the defaulting party to pay, to the party not in default, a sum of money in compensation for the loss, by the non-defaulting party, that he or she has sustained as a result of the failure by the defaulting party to perform the primary obligations in the contract. [224] Moreover, it is abundantly clear, and has been at least since the judgment in McDonald v Dennys Lascelles Ltd, that all primary obligations arising from a terminated contract are, from the time of the termination, discharged. There is one possible exception to that principle, to which Dixon J alluded in the passage recited above, and that exception is that rights that have already been unconditionally acquired are not discharged. Having been unconditionally acquired, such rights are enforceable."

Whether DNK was precluded by the prevention principle from insisting on the performance of cll 7.3.3 and 12.3.1 of the lease by Mr Jain

1. In MP Water Pty Ltd v Veolia Water Australia Pty Ltd (No 3) [2021] NSWSC 1023 (MP Water (No 3)) at [268]-[272], Williams J explained the prevention principle: "[268] The "prevention principle" precludes a party from insisting on the performance of a contractual obligation by the other party if the first party's wrongful conduct is the cause of the other party's non-performance: Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151 ("Probuild") at [114] (McColl JA, Beazley ACJ and Macfarlan JA agreeing); Bensons Property Group Pty Ltd v Key Infrastructure Australia Pty Ltd [2021] VSCA 69 (Bensons) at [101]-[112]. [269] Whilst there is some debate about the juridical basis for the principle, the weight of authority favours the view that it is a manifestation of an implied obligation for each party to co-operate in doing all that is necessary on its part for the carrying out of their contract, by which they have agreed to do something that cannot be done unless both parties concur in doing it: Probuild at [114]. [270] Irrespective of whether the prevention principle is to be applied by reference to breach of an implied obligation to co-operate, the principle has two elements: wrongful conduct and the consequences of that wrongful conduct: Bensons at [109]-[111]. [271] The conduct that is said to be wrongful must be assessed by reference to the terms of the contract: Bensons at [111]-[112]. [272] If the two elements referred to above are satisfied, the operation of the prevention principle may nevertheless be modified or excluded by contract: Probuild at [117]."
2. If we are later found to be in error in the construction of cll 7.3.3 and 12.3.1 and on their proper construction they apply in circumstances where the lease is terminated by the lessee for breach or repudiatory conduct of the lessor, then, applying the principles in MP Water (No 3) at [268]-[272], we would have found that DNK could not insist on the performance of cll 7.3.3 and 12.3.1 of the lease by Mr Jain.

Conclusion

1. The Tribunal made material errors of law in finding that Mr Jain was bound to comply with cl 7.3.3 following the termination of the lease on 20 December 2021 and was liable to DNK for damages in the amount of $3,445.00 for breach of this subclause.
2. The Tribunal made material errors of law in finding that Mr Jain was bound by cl 12.3.1 of the lease after 20 December 2021 and was liable to DNK for damages in the amount of $794.16 for the cost of removing the sign on the balcony and rectifying the damage caused by the removal.
3. The Tribunal made material errors of law in finding that Mr Jain was bound by cl 12.6 of the lease after 20 December 2021 and was liable to DNK for damages in the amount of $32,472.36 for losses over the entire period of the lease.
4. The Tribunal made material errors of law in implicitly finding that Mr Jain was bound by cl 18.7.1.4 of the lease after 20 December 2021 and was liable to DNK for damages in the amount of $1,219.80 for breach of this subclause in respect of the damage to the tiles and balustrade on the balcony.
5. It follows that order 1 in proceedings COM 22/02033 should be set aside.

Issue 10: whether Mr Jain was in breach of any, and if so what, obligations under the lease as at 20 December 2021

Introduction

1. The parties in their appeal submissions did not address this issue.
2. There was common ground between the parties that Mr Jain as at 13 December 2021 was in breach of cll 7.2 or 18.7.1.4 of the lease in respect of the following items: water meter door and cupboard door; interior shop entry exit door; balcony sliding doors; fence relocation; and fire safety compliance.
3. Mr Jain in the notice of appeal implicitly challenged the finding of the Tribunal on the following questions: 1. whether Mr Jain was in breach of cl 5.1 of the lease by not having paid the rent due as at 13 December 2021; 2. whether Mr Jain was in breach of cll 7.2 or 18.7.1.4 of the lease in respect of the replacement of tiling in the kitchen and the breach of the waterproofing membrane.
4. In deciding in the Tribunal Decision at [54] to calculate any arrears of rent as at 13 December 2021 in accordance with the lease and without Mr Jain having the benefit of the 2021 COVID-19 Regulation, the Tribunal did not take into account the prohibition on rent increases during the prescribed period pursuant to cl 6B of the 2021 COVID-19 Regulation and thereby made a material error of law.
5. In deciding in the Tribunal Decision at [89]-[92] that Mr Jain was liable for the replacement of tiling in the kitchen and the breach of the waterproofing membrane, the Tribunal implicitly found that Mr Jain was in breach of cll 7.2 or 18.7.1.4 of the lease.
6. As advised to the parties at the hearing, we decided that we would determine the appeal by way of a new hearing pursuant to s 80(3)(a) of the NCAT Act if we decided that the Tribunal made a material error. We have decided to confine the new hearing to the determination of the issue of whether Mr Jain was in breach of cl 5.1 of the lease by reason of not having paid the rent due as at 13 December 2021. We have decided not to conduct a new hearing on the issue of whether Mr Jain was in breach of cll 7.2 or 18.7.1.4 of the lease in respect of the replacement of tiling in the kitchen and the breach of the waterproofing membrane because this was determined by the Tribunal and Mr Jain has not established any material error of law in the determination.

Consideration

1. We are not in a position to make findings as to whether Mr Jain was in breach of cl 5.1 of the lease by not having paid the rent due as at 20 December 2021. We would have needed to consider the schedule referred to in the Tribunal Decision at [75], and the transcript of the hearing before the Tribunal to determine these claims. We would also have required evidence to enable the determination of whether any rent was owing as at 20 December 2021 taking into account that Mr Jain was an impacted lessee and the prohibition on the increase of rent payable under the lease during the prescribed period pursuant to cl 6B of the 2021 COVID-19 Regulation.
2. As DNK has not established that Mr Jain was in breach of cl 5.1 of the lease by not having paid the rent due as at 20 December 2021, it follows that the finding of the Tribunal that Mr Jain was liable to DNK for damages in the amount of $3,047.53 for breach of this subclause in respect of arrears of rent, must be set aside.

Issue 11: whether s 133A of the Conveyancing Act was applicable to DNK's claim for damages for the breach by Mr Jain of cl 7.2 or cl 18.7.1.4 of the lease relating to the repair of the premises and damage to the common property

Introduction

1. In view of our findings, this issue only arises in respect of the finding of the Tribunal in the Tribunal Decision at [89]-[92] that Mr Jain was in breach of cll 7.2 or 18.7.1.4 of the lease in respect of the replacement of tiling in the kitchen and the breach of the waterproofing membrane.
2. The finding of the Tribunal in the Tribunal Decision at [101] was that s 133A of the Conveyancing Act was not applicable because it deals with the situation where repairs are never likely to be undertaken by the landlord and there was no such evidence.
3. Before considering this issue, it is appropriate to summarise the appeal submissions of the parties.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain made the following submissions: 1. the construction of s 133A(1) of the Conveyancing Act of the Tribunal in the Tribunal Decision at [101] goes against the plain words of the statute, and erroneously applies the words "and in particular" to the totality of the subsection. If the building is to remain standing, then the damages should be the amount of diminution of the reversion; 2. section 133A of the Conveyancing Act is beneficial legislation as explained in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 494; [2008] FCAFC 38 (Tabcorp) at [37]; 3. except for the works which had already been done, DNK was entitled to nominal damages; 4. section 133A of the Conveyancing Act applied to cl 7.3 of the lease.

DNK's appeal submissions

1. In DNK's appeal submissions, DNK made the following submissions: 1. as there is no evidence of any structural alterations that have or will be made by DNK, that aspect of s 133A of the Conveyancing Act is not engaged; 2. Mr Jain argues that s 133A of the Conveyancing Act applies to make good clauses. Clause 7.2 2 of the lease does not require Mr Jain to make good per se, but required him to maintain the property in its condition at the commencement date and do repairs needed to keep it in that condition. Where damage is occasioned to the building or the premises, Mr Jain must repair that damage. The operation of s 133A is therefore not engaged. 3. the plain reading of s 133A of the Conveyancing Act is to avoid lessors obtaining windfalls; 4. the proper construction of beneficial legislation has been explained in various authorities including New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act (2016) 260 CLR 232; [2016] HCA 50 (NSWLAC) at [32]; 5. Mr Jain's submissions have not grappled with the proposition that the damage to the reversionary interest could be equal to the costs of rectifying the damage occasioned to the premises; 6. to read the clause in the way contended by Mr Jain, an aggrieved tenant could intentionally damage demised premises without any consequence at all in circumstances where the reversionary interest is not damaged. Worse still, if Mr Jain were to succeed in this case, an aggrieved tenant could intentionally damage a demised premises, then three days out from a trial, invoke s 133A of the Conveyancing Act which has been held to be an affirmative defence, and walk away from the damage occasioned scot-free.

Consideration

1. In Tabcorp, the Full Federal Court considered the damages applicable for breach of a covenant in a lease not to alter the demised premises. The lease contained a covenant (cl 2.10) requiring the respondent "to maintain repair and keep the whole of the demised premises in good and substantial repair working order and condition", and a covenant (cl 2.11) that required the respondent to yield up the demised premises "in good and tenantable repair order and condition". There was also a covenant (cl 2.13) that the respondent would not, without the approval of the appellant, "make or permit to be made any substantial alteration or addition to the demised premises". Finkelstein and Gordon JJ at [9]-[10] explained the general principles applicable to determine damages for breach of a covenant in a lease to keep and leave premises in repair such as cl 2.10. "[9] A repair covenant is breached not only if the premises fall into disrepair during the term of a lease but also if the tenant destroys or alters the premises. An action may be brought for breach of a repair covenant while the lessee is still in possession during the term of the lease. If brought while the tenancy continues the general rule is that the damages "represents the diminution in the value of [the] reversion owing to the breach of covenant" - an amount that will be determined by reference to the length of time the lease is still to run. The reversion referred to is the reversion that falls in on the expiry of the lease. The diminution in value is preferred to the cost of putting the premises into repair because the landlord is not bound to expend any money recovered as damages in carrying out the repairs and whatever he recovers beyond his reversionary interest is regarded as excess compensation. [10] On the other hand, if the action is brought at or near the termination of the lease the rule … is that the landlord is entitled to recover the cost of repairs. Strictly speaking the cost of repairs includes any loss of rent during the repair period with some deduction, if appropriate, for betterment." (citations omitted)
2. Rares J, having explained at [36] the general principles for the assessment of damages for breach of a repair covenant at the conclusion of a lease, explained at [37] the reason for the enactment of s 133A of the Conveyancing Act: "[37] To ameliorate the harshness of this principle on tenants, some legislatures, but not Victoria's, have enacted provisions such as s 18 of the Law of Property Act 1925 (UK) and s 133A of the Conveyancing Act 1919 (NSW) so as to provide that the measure for damages cannot exceed the value of the damage to the reversion at the expiry of the lease. These provisions adapt a different common law principle applicable where a landlord sues a tenant for a failure to effect repairs during the currency of the lease. It is that the Court ordinarily will apply a measure of damages based on the diminution in value of the reversion. This is because it is not certain that, at the end of the lease, the premises will be worth less to the landlord. The lease may have many years to run before the reversion falls in, yet the common law requires damages to be assessed once and for all. …" (citations omitted)

Issue 12: whether DNK suffered any, and if so what, loss as a result of the breach by Mr Jain of cl 7.2 or cl 18.7.1.4 of the lease relating to the repair of the premises and damage to the common property

Introduction

1. In view of our findings, this issue only arises in respect of the finding of the Tribunal in the Tribunal Decision at [89]-[92] that Mr Jain was liable to DNK in the amount of $14,383.72 (being the total of 10,787.80 plus 5% for preliminaries and 20% for builder margin) in respect of the replacement of tiling in the kitchen and the breach of the waterproofing membrane.
2. Because of its finding in the Tribunal Decision at [101] that s 133A of the Conveyancing Act was not applicable as it deals with the situation where repairs are never likely to be undertaken by the landlord and there was no such evidence, the Tribunal did not make findings as to the damages recoverable by DNK on the basis that this statutory provision was applicable.
3. As advised to the parties at the hearing, we decided that we would determine the appeal by way of a new hearing pursuant to s 80(3)(a) of the NCAT Act if we decided that the Tribunal made a material error. We have decided to confine the new hearing to the determination of the issue of whether Mr Jain was liable to DNK in the amount of $14,383.72 in respect of the replacement of tiling in the kitchen and the breach of the waterproofing membrane.
4. Before considering this issue it is appropriate to summarise the appeal submissions of the parties.

Mr Jain's appeal submissions

1. In Mr Jain's appeal submissions, Mr Jain submitted that the onus of proof rested on the lessor and referred to Midcoast Petroleum Pty Ltd v Kedros Pty Limited [2019] NSWSC 970 (Midcoast Petroleum) at [279].

DNK's appeal submissions

1. In DNK's appeal submissions, DNK made the following submissions: 1. the Tribunal should not have permitted Mr Jain to raise a defence based on s 133A of the Conveyancing Act in the following circumstances; 1. Mr Jain advised, by letter dated 15 August 2022, that reliance would be placed on this section; 2. at the hearing it objected to the invocation of this section at that late stage; 3. had this issue been raised at a previous time, relevant valuation evidence could have been procured to establish that its damages claim is lower than the diminution in value of the reversionary interest. It would if the point is allowed to run, suffer irreparable prejudice, should this section be found to apply to the lease and Mr Jain is able to run the argument that this section restricted its right to recovery; 1. the cost of rectification has been held to be a guide for calculating the diminution in the value of the reversion in Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567; [1943] HCA 8 (Graham).

Mr Jain's appeal submissions in reply

1. In Mr Jain's appeal submissions in reply, Mr Jain repeated his reliance on Midcoast Petroleum at [279] and made the following submissions: 1. it was too late for DNK to raise that it was taken by surprise by his defence based on s 133A of the Conveyancing Act, and referred to Coleman v Seaborne Pty Ltd [2007] NSWCA 60 (Coleman) at [49] and Roberts v Goodwin Street Developments [2023] NSWCA 5 (Roberts) at [173]; 2. DNK misstates the effect of Graham which turned on its own facts; 3. his defence based on s 133A of the Conveyancing Act does not require positive pleading and proof, and distinguished Bulga Coal Management Pty Ltd v Hope Wine Group Pty Ltd [2020] NSWSC 1783 (Bulga Coal).

Consideration

1. In Coleman, the New South Wales Court of Appeal held there was no procedural unfairness in a case involving a claim alleging quantum meruit which was pleaded without identifying whether the claim was for contractual or restitutionary quantum meruit. Hodgson JA at [49] (with Tobias JA at [50] agreeing) made the following observations: "[49] It can be said that the respondent's claim was not particularised as clearly as it should have been, and it can also be said that no amendment had been sought to the statement of claim to increase the amount claimed; and in those circumstances, where the appellants' counsel suggested that the appellants suffered some surprise and prejudice, this might have justified an adjournment if it had been sought from the referee. An adjournment was not sought and the matter proceeded to conclusion. In those circumstances, in my opinion, the claim of want of procedural fairness cannot be made out."
2. In Roberts, the majority of New South Wales Court of Appeal (Kirk JA and Griffiths AJA at [158]-[178]) held there was no procedural unfairness in a case by reason of the departure from the "pleaded" case. Their Honours at [173] held that the observations of Hodgson JA at [49] in Coleman were apposite.
3. We do not accept that DNK can raise the failure of the Tribunal to afford it procedural fairness in permitting Mr Jain to rely on a defence based on s 133A of the Conveyancing Act on the hearing of this appeal for the following reasons: 1. DNK did not lodge a defensive appeal on the ground that the Tribunal failed to afford it procedural unfairness if s 133A of the Conveyancing Act on its proper construction applied to any of the clauses of the lease upon which its claim for damages was based; 2. DNK was notified by note 11(3) of the 1 February 2023 orders that it should be in a position to put forward "any fresh evidence or evidence in addition to evidence received by the Tribunal at first instance" in the event the Appeal Panel decided to proceed, if appropriate, to deal with the appeal by way of a new hearing pursuant to s 80(3) of the NCAT Act. DNK could have overcome the asserted failure to have been afforded procedural unfairness by adducing evidence as to the diminution in the value of the reversion of the premises by the breaches of cl 7.2 of the lease, but did not do so.
4. In Graham, a sublease of a hotel contained a repair covenant which also required the subtenant to yield up the hotel in repair. The sub-lessee decided to improve the hotel. An aspect of the works involved closing up an existing lavatory and installing another in adjoining premises. When the sublease expired the demised premises could not be used as a hotel without a new toilet as the proprietor would otherwise have been in breach of liquor licensing laws. The lessees expended more than £3,000 to instal a new toilet. The High Court set aside the order of the Full Court dismissing the appeal from the trial judge and remitted the proceedings to the trial judge for the assessment of damages according to law. It held that the measure of damages for this breach of covenant was the cost of providing sanitary accommodation of the capacity and quality as demised, including the cost of consequential alterations and applications but did not include the cost of improvements unconnected with the re-establishment of sanitary accommodation of that capacity and quality. It also held that the relevant structural alterations were rendered necessary by the defendant's breach of covenant and, therefore, did not come within the scope of s 133A of the Conveyancing Act. Starke J observed at 587 (with Rich J at 584 agreeing): "In some cases the cost of repairs may measure the damage to the reversion, but that is not true in all cases. The true inquiry is the extent to which the marketable value of the reversion is injured by the breach of covenant." (citations omitted)

Issue 13: the costs of the two proceedings in the Tribunal

Introduction

1. The Tribunal ordered that Mr Jain should pay the costs of DNK of the two proceedings.
2. Neither party made any submissions of the costs of the two proceedings before the Tribunal in the event that the appeal was successful.

Consideration

1. Part 9 (rr 37 to 40) of the NCAT Rules contains provisions dealing with the determination of proceedings. Rule 38 deals with costs in the Consumer and Commercial Division, and relevantly provides: 38 Costs in Consumer and Commercial Division of the Tribunal … (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if - … (b) the amount claimed or in dispute in the proceedings is more than $30,000.
2. The general principles concerning the awarding of costs under r 38(2) of the NCAT Rules were considered by the Appeal Panel in Vella v Mir (No 3) [2020] NSWCATAP 17 (Vella v Mir (No 3)) at [28]-[31]: "[28] Clause 38 gives the Tribunal a wide discretion to make an order for costs. It does not specify the factors the Tribunal must take into account in exercising the discretion, although the discretion to make such an order must be exercised judicially: see, for example, Ruddock v Vadarlis [2001] FCA 1865 at [9]. [29] Where an application has been heard and determined on the merits and Clause 38 applies, the appropriate starting point for the exercise of the discretion is not that the parties are to pay their own costs. Rather, it is the well-established position at common law; that is, that the purpose of making a costs order is to provide compensation to the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, this means that a party who is successful is entitled to an order for costs in its favour, subject to exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] 170 CLR 534; Oshlak v Richmond River Council [1998] HCA 11. [30] In BNT Constructions Pty Ltd v Allen [2017] NSWCATAP 186 the Appeal Panel, having set aside a costs order made in the Consumer and Commercial Division, decided to re-exercise the costs discretion. Clause 38 was the applicable costs provision in that case. At [67] the Appeal Panel noted the following principles relevant to the exercise of the discretion: (1) the starting point is that a successful party should be entitled to an order for costs in his favour; (2) an award of costs is by way of an indemnity and not as punishment; (3) there is no absolute rule that, absent disentitling conduct, a successful party is to be compensated by the unsuccessful party; (4) the factors to be considered are not to be confined as to do so would constrain the general discretion; (5) the relative success of the parties on different issues and the time taken to determine them may be relevant; (6) the nature of the proceedings is relevant; (7) the proper exercise of the discretion requires a decision maker to do justice between the parties and to exercise the discretion having regard to relevant considerations and in a manner which is not arbitrary and capricious. [31] Generally, costs are awarded in favour of the successful party based on the outcome of the proceedings as a whole, without differentiating between particular issues on which the party may not have been successful. That said, a different costs order may be made if the losing party succeeds on significant issues: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]-[36]; Sydney Ferries v Morton (No 2) [2010] NSWCA 238 at [10]-[12]. The dollar amount of a particular claim does not determine its dominance in the proceedings. Rather, regard must be had to all of the work involved in prosecuting and defending the parties' various claims, including but not limited to the time taken up at the hearing."

Introduction

1. Mr Jain did not make any application for the costs of the appeal in the notice of appeal, and notwithstanding note 11(2) of the 1 February 2023 orders, in his appeal submissions or in his oral submissions at the hearing of the appeal.
2. In DNK's appeal submissions, DNK submitted that the appeal should be dismissed with costs but otherwise did not make any submissions in support of an award of costs.

Consideration

1. Rule 38A deals with costs in internal appeals, and relevantly provides: 38A Costs in internal appeals … (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
2. For the purpose of r 38A of the NCAT Rules the amount claimed or in dispute is the amount in dispute on appeal, not the amount in dispute in the proceedings at first instance: Allen v TriCare (Hastings) Ltd [2017] NSWCATAP 25 at [57].
3. We are satisfied that r 38A(2) of the NCAT Rules was applicable to this appeal. The amount in dispute in the appeal is more than $30,000.
4. DNK has been unsuccessful in the appeal. We are satisfied that there is no basis for making an award of costs of the appeal in its favour.
5. As Mr Jain has not made an application for costs of the appeal as required by note 11(2) of the 1 February 2023 orders, we have decided to make no order as to the costs of the appeal.

Conclusion

1. As Mr Jain is entitled to recover damages of $100.00, and DNK is entitled to recover damages of $18,418.25 (being the total of $4,034.53 and $14,383.72), it is appropriate that these amounts be set off against each other.

Orders

1. We make the following orders and notations: 1. leave to appeal is granted against order 2 in proceedings COM 21/51648 and order 3 in proceedings COM 22/02033; 2. the appeal is allowed in part; 3. orders 1 and 2 in proceedings COM 21/51648 are set aside and in substitution the following orders are made: "1) The respondent is to pay the applicant $100.00 immediately. 2) The proceedings are otherwise dismissed. 3) The respondent is to pay the costs of the applicant as agreed or assessed under the applicable costs legislation." 1. order 1 in proceedings COM 22/02033 is varied by substituting the amount of "$18,318.25" for "$60,025.34"; 2. there is no order as to the costs of the appeal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 May 2023